AUO reports losses in Q3

By Lisa Wang / Staff reporter

Fri, Oct 26, 2012 - Page 13

AU Optronics Corp (友達光電), the nation’s No. 2 LCD panel maker, yesterday reported larger quarterly losses from the second quarter, primarily due to an anti-trust payment for a price-fixing lawsuit in the US and an increased loss from its solar subsidiary.

Net loss expanded to NT$16.48 billion (US$560 million) from NT$12.46 billion in the second quarter and NT$15.8 billion in the same period last year.

The company said it had a loss of NT$2.8 billion from its solar unit, but saw losses from its core LCD business narrow to NT$6.3 billion last quarter, from NT$8.4 billion a quarter ago, because of increased demand from China and other emerging markets.

“The quarterly profitability did not meet our expectation. We have made substantial progress in securing orders from first-tier brands, but we were unable to leverage this because higher costs [and lower shipments],” AUO president Paul Peng (彭雙浪) told an investors’ conference.

Shipments would increase significantly this quarter to help lower cost, Peng said.

Speculation surfaced that AUO was one of the flat-panel suppliers for Apple Inc’s new iPad mini tablet, which was unveiled on Wednesday.

“We are on the right track to develop those new technologies. We are speeding up efforts to improve profitability,” Peng said, adding that losses could improve this quarter because of higher utilization rates, without elaborating further.

Peng was positive about the market for larger TV panels as the company saw a recovery in the TV panel market.

He said supply would be tight in the second half, driven by better-than-expected sales of TV sets in China during the Golden Week holiday beginning on Oct. 1.

For next year, supply would become even tighter as demand could grow faster than supply, after global panel makers have kept cautious about new capacity investment over the past two years, Peng said.

This quarter, shipments of TV and PC flat panels are expected to fall about 5 percent from 33.2 million units last quarter, chief financial officer Andy Yang (楊本豫) said.

However, prices for those panels would rise by about 5 percent sequentially, boosted by an increase in TV panel shipments, he said.

Shipment of flat panels for mobile devices are expected to slide by high single-digit percent this quarter from 42.2 million units last quarter, Yang said, citing slow seasonal demand.

AUO’s capital spending for next year would be lower than NT$42 billion for this year, he said.